Cordlife probe: Former Group CEO and 4 board members arrested
A Cordlife branch at Mount Elizabeth Novena Hospital on Dec 1, 2023.
SINGAPORE — Cordlife's former Group CEO Tan Poh Lan has been arrested along with four directors in relation to an investigation into the company's mishandling of cord blood units.
In a bourse filing early Friday morning (March 22), Cordlife said it received a notice on March 19 from the police’s Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) requiring documents and information in connection with investigations into an offence under the Securities and Futures Act.
“The company understands that the offence is in connection with potential breaches of the disclosure obligations of the company in relation to the irregular temperatures of a certain cryogenic storage tank of the company, which was first disclosed by the company in its announcement dated Nov 30, 2023,” Cordlife said in the filing.
Seven of its storage tanks were exposed to temperatures above acceptable limits, damaging cord blood units belonging to at least 2,150 clients. Another 17,000 clients were possibly affected.
All five arrested have been released on bail.
Apart from Ms Tan, the others are acting chairman Ho Choon Hou, independent directors Yeo Hwee Tiong and Titus Jim Cheong Tuck Yan, as well as non-independent non-executive director Chow Wai Leong.
Ms Tan resigned in October 2023 to "pursue personal interests" - before the incident involving damaged cord blood units was made public in November that year.
Her last day with the company was to be March 31, 2024, the Singapore-listed company had said last year.
Cordlife's Chief Financial Officer Thet Hnin Yi has been asked to assist with investigations. She has not been arrested, the company said on Friday.
In addition, four directors who are currently not based in Singapore are required to attend a police interview on April 2.
They are former chairman Joseph Wong Wai Leung, who stepped down earlier this year due to "personal family and health reasons", Mr Zhai Lingyun, Ms Chen Xiaoling and Mr Yiu Ming Yiu.
Cordlife said it will cooperate fully with all regulatory authorities and update its shareholders.
“At the time of this announcement (on March 22), the company has received undertakings from all the directors, Ms Tan Poh Lan and Ms Thet Hnin Yi, to inform the board of the ongoing investigations and subsequent developments,” it stated.
Operations will continue as normal, said the company.
It added that for now, all directors should continue serving on the board although two of those arrested felt they were not suited to remain in their position.
"Given that the current board has been overseeing and providing guidance on the ongoing work undertaken by the company to investigate and address the lapses identified by the Ministry of Health in relation to the company's Singapore operations, the majority of the board is of the view that it would be in the interests of the company for all directors to continue serving on the board," Cordlife said in the filing.
"The board will continue to consider and assess the suitability of all directors to continue serving on the board, pending the development of the investigations."
It added that it will consider appointing new independent directors "to serve as additional checks and balances".
Cordlife on Friday also requested the lifting of the trading halt that it called for on March 14.
MISHANDLING OF CORD BLOOD UNITS
The mishandling of cord blood units was made public on Nov 30, 2023, when the Ministry of Health (MOH) announced that investigations against the private cord blood bank were ongoing.
The ministry had received a complaint from a member of the public on July 24, 2023, about alleged issues with a storage tank.
It later emerged that Cordlife's board knew of the issue months earlier, in February 2023.
The damaged cord blood units were from one tank that belonged to 2,150 customers.
The remaining six tanks were sent for further tests and the final results to determine the viability of mishandled cord blood units were estimated to be ready by end-March, MOH said previously. This is due partly to capacity constraints at a third-party laboratory conducting the tests.
"Preliminary investigations show that two of the six affected tanks, which stored about 2,300 cord blood units, were unlikely to be adversely affected by the temperature excursions," MOH said in January.
In December 2023, Cordlife said it would accept a six-month suspension given by the ministry.
The company is required to rectify a list of potential non-compliances by May 31. These include ineffective incident reporting frameworks, inadequate training and competence of staff, and the inappropriate storage of cord blood units, among others.
Its cellular therapy accreditation has been indefinitely suspended by the Foundation for the Accreditation of Cellular Therapy, a global non-profit corporation which conducts inspections and accreditation in cellular therapy. CNA
For more reports like this, visit cna.asia.
